Business Ethics True/False

A major objection raised by critics of Utilitarianism is that it supports justice and individual rights even when doing so works to the detriment of human well-being.

F

Socrates does not insist that Wendy accept the tenets of the Villagers Creed, only that she take it seriously.

T

Responding to Greg Smith's claim (in a New York Times op-ed) that Goldman Sachs' culture went from one emphasizing integrity, humility and service to their clients to one of making money even at the expense of their clients, Wendy agrees that Wall Street culture is aggressive, egotistical and greedy, but she denies that executives on Wall Street were prone to engage in unethical or illegal behaviors — this position of hers being confirmed in the early sections of Inside Job.

????

According to that handout, guilt at having violated one's commitment to internalized rules was the sanction that kept people from straying from the traditional path in pre-modern societies, whereas shame was used to keep people in line with moral principles in the modern era.

F

Bounded ethicality results from external factors in our work environment like goals and rewards, organizational pressures, and the way in which decisions are framed.

F

Compliance programs that impose penalties on employees for unethical behavior are an important means of helping employees maintain their focus on the ethical aspects of their situation and keeping them from adopting a cost-benefit analysis of it.

F

Emotional health and safety, the absence of pain and suffering, and getting sufficient rest are all on Wendy's list of tangible needs, but not skills, knowledge, social interactions or access to meaningful relationships.

F

Enron's "rank and yank" employee review process presents clear evidence against the claim that anxiety about one's failure to live up to organizational norms and expectations can help explain the weakening of ethical norms in business life.

F

Ethical fading involves personal biases or unconscious cognitive defects internal to our psyches that cause us to ignore or lose focus on ethically relevant factors.

F

In Inside Job, ratings agencies like Standard & Poor's and Moody's gave AAA ratings to CDOs that proved to deserve much less favorable ratings, but the fact that they were paid to rate these CDOs by the investment banks that issued them had nothing to do with that.

F

In SCTWS Natalie presents data about unemployment, poverty, and standards of living that supports the idea that when businesses create wealth it inevitably spreads through the rest of society.

F

In SCTWS, Wendy is unable to respond to Socrates' feigned claim that ethics is rubbish.

F

In an effort to defend the economic policies she favors, Wendy tries to distance herself from several of the key tenets of the Business Creed.

F

In-group favoritism involves hostility towards those outside one's group, while ordinary prejudice is basically just a manifestation of our innate egocentrism.

F

Psychological reactance refers to our tendency to maintain a moral identity by balancing ethical infractions with compensatory good deeds.

F

Robert Solomon holds that there is an intrinsic conflict between ethics and the successful conduct of business, so that the legal regulation of business is the only way society can cope with amoral business practices.

F

Socrates admits that Caterpillar's practices of freezing employee wages and pensions in times of high profits, while generously rewarding top executives at the same time, are compatible with doing its share in supporting the kind of life we want in the village, once long-term developments are fully considered.

F

Socrates dismisses the claim that Caterpillar's international success owes a lot to the U.S. military.

F

Socrates takes issue with Milton Friedman's claim that all concentrations of power, including concentrations of economic power, constitute a threat to freedom.

F

Socrates takes issue with Wendy's claim, that the interests of shareholders take priority over the interests of employees because the shareholders have risked more to keep the firm in business.

F

That we are not usually rewarded for noticing the unethical behavior of others is a reason for why we don't notice such behavior, but it is unscientific to think that we don't notice the unethical behavior of others because we are busy paying attention to other things.

F

The authors believe that we are more likely to acknowledge the influence of bias and situational factors on the ethicality of others than we are to acknowledge such influences on our own ethicality.

F

The authors emphasize how effective oaths, mission statements and ethical training programs are in reforming corporate culture.

F

The key to ethicizing corporate culture is to incorporate ethics into the firm's formal culture, including a system of sanctions, which will give employees a self-interested motive to behave ethically.

F

Utilitarians agree that their philosophy will frequently conflict with our intuitions condemning injustice and unfairness in a wide variety of cases, but they claim we should dismiss those intuitions, since justice and fairness are not factors worth worrying about to begin with.

F

Wendy accepts the idea that the end justifies the means, and so is unconcerned with whether or not a consistently applied policy would have to be able work as a law of nature in order for actions carried out in accordance with it to count as moral.

F

While Utilitarians place a high value on happiness, they maintain that the morality of an action is more important than its effect on happiness.

F

A social dilemma is a situation where the collective interests of a group of individuals conflict with those individuals' egocentric interests.

T

According Solomon, the viability of business in general depends on mutual trust, adherence to rules, and a sense of fairness, with the result that companies who adopt practices running contrary to these values cannot reasonably expect to increase their profits in the long run.

T

Bazerman and Tenbrunsel (in Blind Spots) attribute much of the unethicality we find in the business world to bounded awareness, which we are defining in terms of subconsciously ignoring, or otherwise failing to be sufficiently aware of ethically relevant features of our choice situations.

T

For Wendy, actions should be considered ethically positive when they promote or facilitate the attainment of human needs, ethically negative when they prevent the satisfaction of human needs or make that more difficult.

T

Her criterion for something counting as a need, and not just a want, is that it be a necessary condition for a human being's healthy growth, development, flourishing and a basic sense of satisfaction or well being.

T

In Enron: The Smartest Guys in the Room, fraudulent attempts to misrepresent the company's finances were motivated by pressures to keep the company's stock price high.

T

In the NASA Challenger case, ethical considerations faded from consideration when Morton Thiokol executives framed the issue of whether or not to revise their engineers' no-launch recommendation as a management decision.

T

Mill emphasizes that deviation from the truth weakens the trustworthiness of human assertions, and thus seriously detracts from civilization, virtue and happiness.

T

Our tendency to overlook the unethical behavior of others when it is not in our interest to notice, fully appreciate or act on their wrongdoing is called motivated blindness.

T

Rule Utilitarianism is primarily focused on formulating and justifying, ahead of time, rules that would maximize social utility if adhered to, thus denying the appropriateness of waiting to apply the Principle of Utility to each choice situation as it comes up.

T

Socrates accuses the CEO of not living up to her implicit promise to promote the well-being of the company's stakeholders as well as she can.

T

Socrates claims that individual conscience, personal emotions, and social or cultural traditions or laws cannot provide an objective standard for ethical permissibility, since they are subjective, or at least arbitrary enough to preclude a universal consensus.

T

Socrates disagrees with Wendy's claim that, with respect to the significance of various aspects of economic activity, the facts speak for themselves.

T

Socrates maintains that citizens would voluntarily authorize the use of public money to provide the infrastructure businesses need in order to flourish only if they could expect businesses to provide them with a reasonable return on this investment.

T

Socrates represents Kant's philosophy as focused on respect for human dignity and as based on principles derived from reason alone.

T

Socrates suggests that Wendy's objectivity will be enhanced if she adopts the perspective of one behind Rawls' "veil of ignorance".

T

Socrates suggests that if one adopts what Sergio and Natalie call the Village Creed, the standard business procedures that Wendy and others of her class endorse can reasonably be interpreted as akin to a kind of con job, in which the villagers are induced to cooperate in what amounts to their exploitation by the business elite.

T

Socrates suggests that lowered tax rates are part of the problem of rising deficits.

T

Socrates thinks that Wendy and the other executives at her firm should take responsibility for the negative consequences people have suffered as a result of the firm's activities.

T

Socrates tries to get the CEO to see that the point of business is not just to make profits for the owners of the business, and he contests the claim that the CEO has not lied, cheated or stolen anything.

T

The handout, Why So Unethical?', suggested a possible explanation for frequent wrongdoing in business: the fragmented knowledge conditions typical of contemporary bureaucratic contexts often leave people in the dark as to the full ethical significance of their actions.

T

These authors continue our engagement with normative ethics, using psychological research to help us fine-tune our grasp of the principles determining how people should act.

T

To apply the Principle of Utility, one must consider all feasible options in the choice situation, and estimate the harms and benefits that are likely to accrue to all those affected by each option.

T

We learn from Inside Job that economics professors often earn large sums of money as consultants for financial firms, and that they are sometimes paid to write papers supporting the economic views of those who hired them.

T

Well-intentioned rewards for desired behaviors can have unintended side effects, such as an obsessive focus on achieving the rewarded goals and relative neglect of other important goals that are not rewarded.

T

Wendy ends up agreeing with the historical Socrates' idea that happiness is obtainable by living a virtuous life, but not with his idea that vice ends up harming those who engage in it.

T

Wendy insists that profit has to be the measure of success for any business, but she proposes that optimum profits, rather than maximum profits, should be the standard — where optimum profits are those that are compatible with the long-term viability of the firm, ethics, and business' job of contributing to the kind of life we want for society.

T

When Socrates introduces the topic, Wendy resists the idea that there is a conflict of interest attached to her dual roles as CEO and Chair of the Board of her firm, denying that this could undermine the Board's objective oversight of the CEO and her management team.

T

While intended to promote transparency, which increases the likelihood that unethical behavior will be exposed, the authors suggest that disclosing conflicts of interest sometimes does not have the expected beneficial results.

T